First Foreign Arbitration Award Recognised in UAE under NY Convention

In Commercial Case 35/2010 the Fujairah Court of First Instance ratified two English arbitration awards made under LMAA Rules. The Fujairah Court followed two decisions of the UAE Court of Cassation which held respectively that the enforcing court is precluded from examining the merits of the award (Cassation No. 556 – 19 April 2005) and conventions made between the UAE and other countries regarding the enforcement and execution of arbitral awards are to be considered as domestic legislation (Cassation No.774 – 7 April 2005).

The court ratified the substantive award together with interest until the date of actual payment and a second award relating to the costs of the arbitration, again, with interest until actual payment. The court also ordered the defendants to the claim to pay legal expenses and attorney’s fees. The claimant was represented by Fichte & Co. of Dubai.

The UAE acceded to the New York Convention by Federal Decree No.43 2006 with effect from 19 November 2006. This is believed to be the first occasion since then that a court in the UAE has ratified a foreign award under the Convention. While there is no formal system of precedent in the UAE this is a most encouraging development for the growth of international arbitration not only in the UAE but in the region in general.

On the other hand, it is still necessary to sound a note of caution – it was only in November 2009 that Saudi Arabian Board of Grievances refused to recognise an award in favour of the well-known Dubai developer Emaar, notwithstanding that Saudi Arabia is not only a signatory to the New York Convention but the UAE is also a party to the 1983 Riyadh Convention on Judicial Cooperation which provides for mutual recognition and enforcement of judgments and arbitration awards.

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Michael Black QC